Emergent Asset Management Ltd was founded with the launch of the firm’s first emerging markets fund in 1997 at a time when emerging markets were universally viewed as a highly specialised and risky area of investment. The common perception was that power was vested in the dominant American and associated European markets; very few appreciated that emerging markets’ funds were investing in the future engine of global growth. Thus early-stage investing, became a characteristic that has been the hallmark of Emergent’s activities to this day and is reflected in its motto, ‘Pro Alia’ (‘Before Others’).

The Asian crisis (1997) and the Russian sovereign default (1998) confirmed the belief that these new markets were highly unstable. These two significant events, together with the later 2001 collapse of Argentina – once the darling of the emerging market world – taught Emergent that National Financial systems could fail despite appearing to be both strong and well supported.

Then came the cataclysm of 9/11 – not a random act of terrorism, in Emergent’s opinion, but a watershed in World affairs. Prior to this, it was economic trends that largely drove the understanding of investment, but Emergent believed that geopolitics would dominate the next decade. It was critical to find a model to explain and predict the new paradigm; the key issue was whether the US was facing structural decline.

To attempt to explain the new unfolding geopolitical situation, David identified six themes, outlined in the “Five Stages of Empire” model in BREAKING THE CODE OF HISTORY, as follows: the multi-polar world, commodities; polarisation, global military balance, disease and climate change which were all driven by demographics.

Applying these themes, Emergent has accurately predicted the dramatic shifts in geopolitical power over the past decade, the dynamics of markets and the commencement of a new 25-year commodity cycle (from 2003). With this knowledge, for example, it focused in 2001 and onwards on small oil-exploration companies. Emergent’s work with Heritage Oil (which, at the time, had a market cap of some $100 million) helped it to raise critical funding for its investment in Uganda and to grow into the multi-billion dollar company it is today. Emergent went on to help raise the initial funding for Seadragon, a company set to build two sixth-generation oil rigs using unique build solutions, although, as a result of the 2008 credit crunch, Seadragon was unable to secure sufficient equity funding and the project foundered. It was a sobering lesson that highlighted the weakness of the Western financial system to invest in the infrastructure that is so vital to ensure the security of commodities for its economies.

The commodity cycle starts with energy, is followed by metals and is completed finally by agriculture. Thus, in 2006 Emergent went on record identifying “food security as the next energy security,” and soon after launched its African Agricultural Land Fund. This, together with its operating company EmVest, which was based in South Africa, was dedicated to the development and management of the fund’s lands and industrial assets. Emergent sold its stake in EmVest in September 2011. The location of the project in Africa had been determined by the Five Stages of Empire model and the resulting understanding of the potential of the Africa Sub-Saharan landmass driven by its powerful demographics and massive reserves of natural resources.

Meanwhile, Emergent’s hedge funds have been committed to the task of alpha generation and have outperformed in periods of high volatility. It is notable that they have been exceptionally profitable during the crises in Asia, Russia and Argentina, and again during the 2008 credit crunch, recording a top industry ranking by Bloomberg in 1997, 2001 and again in 2008. The 2008 credit crisis was predicted by the Five Stages of Empire model applied to the US and was understood for what it was: namely, the last empire of the West in overextension and decline. Emergent believes that its understanding of the shift of power from West to East will enable it to offer outstanding opportunities in its hedge funds in the volatile times ahead.

The financial world has suffered considerable criticism since 2008, much of it valid. The Western financial system, through the support of its governments, encouraged banks to overleverage in the hope that by so doing they could turn what little incremental real growth that existed at the time, into larger bottom-line numbers. As applied to the US, this is typical of an empire entering the final stages of overextension and decline, that will do anything possible to protect itself, having lost its creative competive edge, and positive demographic drivers. That process is continuing today in US and Europe through the printing of money benignantly labeled as quantitative easing. Whilst the Central Bankers are convinced that these measures will be effective, the reality is that the real wealth of the western world and especially the middle classes is being eroded at a frightening rate through stagflation, a trend that we expect to continue at an accelerated rate as the decade unfolds. The sad reality is that these measures are analogous to the application of a bandage that does not address the fundamental problem. The only effective cure for the western economic malaise requires new innovative reformist measures to kick-start economic innovation that will once more create sustainable economic growth in the western  world.


The geopolitical model described in David's book BREAKING THE WORLD OF HISTORY could, by its very nature, have only been derived from the environment of the financial world in which collective behavioral patterns can be identified and extended to the larger picture of history and world affairs. Consequently, it is our hope that this book and its ideas might remind the reader of the positive contribution that finance and free capital markets have for over two hundred years made to what is described herein as the Western Christian Super-Empire.

These ideas continue to inform Emergent’s view of the world and investment opportunities from the top down. They have allowed us to navigate the uncertain waters of the last decade and will guide us equally well in the coming years to the benefit of our investors and clients. We at Emergent hope that BREAKING THE CODE OF HISTORY will provide positive insights and perspectives on world affairs, investment and good government, and will contribute to a wider public knowledge of the key issues facing us all globally over the next decade.